But Stephen Nickell of the Office for Budget Responsibility (OBR) told MPs that the issue of immigrants was “not very important” economically and had had little impact on wages.

He also warned the NHS would be in “dire straits” without staff from overseas.

“At the end of the day, let’s say over the next ten years or so, the general consensus is that for the native population, the existing population, immigration may be a little bit good, it may be a little bit bad economically," he said.

“But there isn’t overall that much in it. Obviously there are special situations like in the health service, for example - some 35% of health professional are migrants.

“It’s quite plain that, if they weren’t there, the health service would be in absolutely dire straits,” he told the Treasury select committee.

Mr Nickell accepted that the pay of unskilled workers had been held back by cheap overseas labour but not to a “massive extent.”

He added: “The evidence suggests that, since more immigrants mean more housing, more roads, more airports, more incinerators, more more more of this being required, and since the evidence would suggest that people by and large don’t like these things - especially if they are near them - I think that is the key issue about immigration that people may wish to face up to.

“One argument says ‘We are a small island, not much room’.

“On the other hand, of course - there is masses of room. The urbanised part of Britain occupies less than 10% of the surface area.”

The head of the OBR, Robert Chote, told the committee the gap between consumer spending and wage increases was the greatest for decades.

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“If you look at the last year, real consumption growth has been running further ahead of real wage growth than in almost any other year over the last 15 or 20.

“Therefore in our forecast the main reason we expect the quarterly rate of growth to slow is that you see consumer spending moving more into line with income growth, and being less driven by the sort of decline in saving you are talking about,” he said.

“I’m really concerned that we are not focusing on the extent to which monetary policy is dis-coordinating the market for loanable funds, sending false signals about where we are in the production possibilities frontier, stimulating over-consumption and false investment. And I think we’re going to be caught out by another horrible crash as a result,” he said.